Estonia Rolls Back National Cryptocurrency Plans After Irking Banking Authorities

Estonia has recently decided to roll back its plan of issuing a national cryptocurrency, after local banking authorities and ECB president Mario Draghi frowned upon it.

Instead, the country's Estcoin is set to be given as an incentive to members of its e-residency program.

Estonia has recently decided to roll back its plan to issue a national cryptocurrency called “Estcoin,” after European Central Bank president Mario Draghi and local banking supervisors criticized the idea, Bloomberg reports.

Kaspar Korjus, the managing director of the Baltic nation’s e-residency program, revealed plans to develop and issue an Estcoin back in August last year. The cryptocurrency was set to become the country’s virtual currency, while potentially developing into the official currency of its e-residency program, which allows foreigners to use Estonia’s electronic identification to remotely sign documents and set up businesses.

Back in September Mario Draghi stated that “no member state can introduce its own currency; the currency of the eurozone is the euro.” The governor of Estonia’s central bank, Ardo Hansson, echoed Draghi’s stance, and lamented “misleading reports” on the Estcoin coming from government agencies.

As a result, Estcoins aren’t going to be pegged to the euro or given to citizens, and will instead be given as an incentive to e-residents, according to an official in charge of the country’s IT strategy, Siim Sikkut.

Sikkut was quoted as saying:

“We agreed in discussions with politicians that Estcoin will proceed as a means for transactions inside the e-resident community. Other options aren’t on the table. We’re not building a new currency.”

Siim Sikkut

Korjus, who authored the national cryptocurrency’s plan, confirmed Sikkut’s words and added that a “community Estcoin” is being analyzed. He noted, however, that while the cryptocurrency may help e-residents, it will “definitely not be a national cryptocurrency.” Notably it may still be fruitful, as over 35,000 identification cards have been issued to foreigners through the e-residency program.

Recently, Switzerland’s Federal Council requested a study on the risks of benefits of launching its own cryptocurrency, a so-called “e-franc.” The country’s government noted there were potentially “both legal and monetary” hurdles, after a proposal was brought forth by a lawmaker.